What is the Renko Charts Indicator for MT4?
MT4 remains the most popular forex trading platform despite advances in online chart systems.
It's also free and simple to use. When utilizing MT4, you may simply locate custom indicators and expert advisors.
If you can't locate an indicator or Expert Advisor(EA), you may hire an MT4 developer for a reasonable price.
There are various MT4 Renko chart indicators and Renko expert advisers.
All these MT4 Renko chart indicators generate Renko charts.
How Does a Renko Chart Work?
The Renko Chart was developed by Steve Nison, who first introduced it to the financial community via the publication of his book titled "Beyond Candlesticks" in 1990.
To put it another way, it is a kind of price graph. You may have heard of Japanese Candlestick Charts and Bar Charts and Line Charts. Although the Renko Chart is highly popular, the MetaTrader 4 (MT4) platform does not come equipped with this chart type by default.
The term "brick" comes from the Japanese word "renga," which is where the name "Renko Chart" originates. It is easy to see why it was given that name: the Renko Chart illustrates changes in price by using rectangles shaped like bricks.
How Are The Renko Chart Bricks Formed?
Candlestick charts and Renko charts are fundamentally different. The primary distinction between these two sorts of charts is the information they display and how they are constructed.
The conventional Candlestick Chart uses the open, high, low, and close of each time frame, e.g. 1 minute, 5 minute, 1 day etc. Put another way, it monitors price fluctuations with respect to periods. The Y-axis of a chart reflects price levels, while the X-axis represents periods.
The Renko Chart differs greatly from this style of price display. It completely disregards the time aspect and concentrates entirely on price changes. Based only on price fluctuations, this algorithm generates a chart that successfully illustrates momentum and trend.
Each Renko Chart brick indicates a unit of price change. These bricks are generated based on your settings, which means they will only develop when the price has changed by a certain number of pips.
For example, if you specify that the price must move 40 pips before forming a brick, the Renko Charts will not create a new brick until the price has moved 40 pips.
Check out the comparative image below to see how Japanese Candlesticks and Renko Charts vary
How To Use the Renko Charts Indicator for MT4 In Trading
You may use the Renko Charts Indicator in a variety of ways. On the one hand, it depicts a consistent and unambiguous image of the trend. On the other hand, however, remember that the Renko Chart depicts price changes independently of the timeframe covered. Thus it may not match Japanese Candlesticks at the same time.
You will have to manually calculate the price of Renko bricks, which has benefits and drawbacks. Let us demonstrate the most fundamental and straightforward trading method based on the Renko Chart.
Signal to Buy
For a long trade, follow these steps:
- At least three consecutive blue bricks should be formed on the chart.
- Determine the price that corresponds to the third blue brick's high.
- Open a buy position at that price level.
- Set your stop loss to just a few pips below the price's most recent swing low (not brick)
- Use a risk: reward ratio or your own way of trade exit.
Signal to Sell
For a short trade, follow these steps:
- At least three consecutive red bricks should be formed on the chart.
- Determine the price that corresponds to the third red brick's low.
- Open a sell trade at that price.
- Set your stop loss to just a few pips above the price's recent swing high (not brick)
- Use a risk: reward ratio or your own way of trade exit.
Keep in mind the importance of smart money management if you want to attain good outcomes. You need to have 100% control over your emotions and your psychology and self-control if you want to succeed at trading.
It is essential to understand not just when to trade but also when not to trade.
Trading should be avoided at adverse times and market circumstances, such as periods of low volume and volatility, outside the main trading sessions, exotic currency pairings, larger spreads, and so on.
What are the steps to configure the Renko Charts Indicator for MT4?
Download the Renko Charts.rar package from this link, unpack it, and then place the Renko Charts.ex4 or Renko Charts.mq4 indicator files into the MQL4 folder of the Metatrader 4 trading platform using copy and paste.
You may access this folder by selecting the appropriate option from the top menu, which is organized as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
After that, go to the left side of the MT4 terminal on your computer. Locate the gauge name in the Navigator, right-click it, and choose Attach to the chart from the context menu.
Conclusion
The Renko Charts indicator is highly recommended to include in your trading arsenal. In addition, a decent forex indicator will almost certainly boost your chances of success.
Nonetheless, keep in mind the importance of maintaining reasonable expectations. Like any other technical analysis tool, it cannot generate 100 percent correct signals all of the time.
As a result, this forex indicator sometimes generates erroneous indications. Its performance will be very variable depending on market circumstances. You are allowed to create your own trading method based on it.
You might be also interested in What is the Trend Wave Indicator on MT4? and What is the Cap Channel on MT4?
